As a precursor to the biannually held Canton Fair, in southern China’s Guangzhou region and to promote healthier trade volumes between our two nations, Mr. Wang Zhiping, vice president and secretary general of China Foreign Trade Center, the main government body that organises the China Import and Export Fair, also known as the Canton Fair visited New Delhi and Mumbai to talk to potential traders and businessmen interested in visiting what is now the world’s largest Trade fair.

Supported by the commercial section of the Chinese Embassy, Mr. Peng Gang – Economic and Commercial Councilor as well as Orbitz Corporate and Leisure Travels the official travel partner of the Canton Fair, Mr. Wang invited more Indians to attend the 113th Canton Fair to be held in April and October this year.

Started in 1957 as a window for Chinese exports to the world, the Canton Fair has recently begun an international pavilion for foreign importers into the Chinese market. This year, Mr. Wang said the China Foreign Trade Center expects 210,000 buyers from 200+ countries to attend the canton Fair, an increase from 190,000 buys last year.

In a recent International Monetary Fund study, India’s gross government debt burden emerged as the highest contender, from within the developing nations – touching 70 percent of national GDP, while China came close to the end, with minimal government debt slightly above 20 percent of GDP. Forecasts by the IMF also suggest that a five year trajectory will maintain the same trend.

While both India and China’s governments are expected to see implicit debt rising – that from predicted pension and healthcare spending, China’s though voluminous is expected to stabilize with fiscal policy adjustments. India’s public debt though will prove to be the biggest elephant in the room.

Easing tensions, increasing elasticity and in order to boost the economy, India subsequently dropped interest rates by a predictable 0.25 basis points to 7.75 percent. The Reserve Bank of India also lowered the amount of money that banks need to keep in reserve, a move it said should provide Rs 180 billion (US$3.4 billion; UK£2.1 billion) of extra cash for them to lend.

Chintamani Nagesa Ramachandra Rao, better known as CNR Rao, one of India’s most noted scientists was recently conferred one of China’s highest awards by the Chinese Academy of Sciences (CAS). The 2012 Award for International Scientific Cooperation, given for boosting Sino-India scientific cooperation was conferred on the 78 year old scientist and advisor to the Indian Prime Minister.

“Rao is devoted to the research of solid-state and structural chemistry. He was awarded for his important contributions in boosting scientific cooperation between China and India, as well as raising the scientific capabilities of developing countries”, state-run Xinhua news agency quoted CAS as saying in a statement. One of three to be handed the award this year, Prof Rao has visited China several times in his illustrious career at the Indian Institute of Science (IISc) and Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR).

An ardent believer in India’s scientific prowess equalling that of China’s, CNR Rao encouraged the improvement of facilities at educational institutions rearing the next generation of scientists. A huge contributor in the field of nanotechnology, Rao was invited to speak at multiple forums in China. His experiences in China, led him to encourage a renewed spirit in R&D in India. One of the pioneers who encouraged innovative thinking, Rao said that the Chinese were making rapid progress in nanotechnology with their contribution through research papers increasing every year. “Today, China is contributing 40 to 50 percent of the technology papers in the world, while India’s contribution is less than 10 percent, He told the Hindu in a 2006 interview

Mandarin, the language which gave Hindi words like Cha for tea and whose rich pictorial script reveals deep cultural roots is now being taught in prestigious management and technology schools in India.

IIM-A, short for the Indian Institute of Management Ahmedabad and IIT-B, the Indian Institute for Technology Bombay (Mumbai), both premium institutions are teaching Mao’s tongue to a growing number of eager Indians. Keen to explore business opportunities with India’s largest trading partner, about 70 out of 380 second-year students at IIM-A have opted to learn Mandarin as a foreign language this year to improve their job prospects.

Sunil Chhipa, a student who enrolled himself for Business Chinese, told the Times of India, “China is the second best option to work for me after India. I took up the elective based on student feedback from previous years. The course has been designed to give us a brief idea on the language, cultural differences, norms and business environment in China.”

Marking a sharp reversal from two years ago when IIM-C candidates rejected job offers from three Chinese financial service providers, the newer batches are looking across the Himalayas, peeping through the bamboo curtain to equip themselves better for the future.

Gaining an edge as a foreign language over French and German, languages that most Indians grew up learning until very recently, IIM-A’s Mandarin class was split into two this semester to accommodate the swelling student base. IIT-B, which has tied up with Beijings Language and Culture University for a teacher exchange too has seen a successive growth in the number of their students learning Mandarin.

You might hear of the Zoomlions, Huawei’s, Tata’s and Reliance’s of the world browsing businesses and plumping profits between China and India, but an increasing trend and a strong flow of human and financial capital crossing between China and India are also smaller, lesser known companies in either market, that anonymous to those outside their core markets are creatively and seamlessly cementing links amongst out two nations. Forging into new market, treading new tie-ups and bravely going where few large companies have been, smaller firms from both China and India are exploring each others markets.

Take for example, China’s Yapp, an automotive company based in the town of Yangzhou, not too far from the Eastern megapolis Shanghai, which has inked a 49:51 JV with India’s Zoom Enterprises and operates facilities in Chennai and Pune. Manufacturing plastic fuel tanks, the JV supplies to major car makers including Volkswagen India, Ford India and Mahindra. According to Sun Yan, President of YAPP: “We expect India to be the biggest overseas market for us. As India is fast becoming a big producer and consumer of automobiles, second only to China, we are nevertheless positive on our growth potential in this country”.

Similarly, Indian Technocraft Industries has set up a factory in Nanjing, on China’s Eastern seaboard for scaffolding systems, steel boards and clamps. The owner of the little known equipments company told CNN, “In China, the benefit primarily was the raw material cost, … The overall cost of production in China is much lower. Even now, the cost differential between here and China is around 10 to 15 percent. And then you have the labor cost difference. Once you add in all the productivity etc. the labor cost in China is definitely lower.” The company which has manufacturing facilities in Thane, a district outside Mumbai, added “In India you have a lot of hidden costs,” Saraf explained. “In China they welcome foreign investment, they welcome industries to be set up there. So setting up was relatively easy and quite fast so you also save on the time. The faster you start up the faster is your recovery on investment.”

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About Inchin Closer

INCHIN CLOSER is a professional services consultancy that offers multinational clients comprehensive support prior to and post incorporation in both India and China. We believe that companies and individuals need more than just legal and tax guidance while navigating China and India, as result Inchin Closer aims to be your one-stop guide to hold you through the complicated and fun aspects of these two dynamic nations.

In order to improve the information exchange between the two nations, we also run a daily news and analysis section. Written exclusively by Indians and Chinese working between the two nations, we aim to provide the reader with current India-China news as we see it, as it impacts us, and how we would like it to be in the future.